“Given that we believe Microsoft feels emboldened with the success of LinkedIn, we think such a renewed focus on SaaS applications could include M&A,” BMO Capital Markets analyst Keith Bachman said in a note to clients Thursday. “One area that we think could be a new growth opportunity within the SaaS market is in HCM, or talent management in particular, which would further leverage LinkedIn.”

Microsoft purchased LinkedIn for $US26.2 billion in June 2016. But for fiscal year 2017, the service brought in just $US2.3 billion, or 2.5% of Microsoft’s total annual revenue.

The company could leverage the data it harvests through LinkedIn profiles, job applications, and its subsidiary education site Lynda, to power its Dynamics platform for talent management, or HCM, Bachman says. Dynamics made up just 2% of Microsoft’s total revenue in 2017, BMO estimates.

“Microsoft has a relatively modest presence in the SaaS applications market segments, relative to both Microsoft’s total revenues and various SaaS market segments. Moreover, we believe that Microsoft is underperforming its potential,” Bachman said.

“We believe that total Dynamics revenue could grow by 13% to ~$US2.5 billion in FY18, driven by cloud CRM and ERP suites.”